The Society of the Plastics Industry Inc. is hiking dues, particularly for processors, and trimming spending by 20 percent in some programs to close a serious budget shortfall.
The association's leaders decided unanimously at a May 17 meeting to raise dues and continue with spending cuts to close an estimated $1.5 million hole in core operating programs, including government affairs, work-force training and safety programs. The group's core budget was about $9 million last year.
Like many trade associations, Washington-based SPI has been hurt financially as industry sales, which are the basis of its dues, have tumbled.
But the group also has some unique problems - it lost members from the fallout of its feud with the American Plastics Council and has been unable to boost membership substantially despite a well-publicized dues cut for processors in 1997.
``Everyone would have preferred not to have dealt with this in today's economy,'' said SPI President Don Duncan.
SPI is raising dues for all members by 3.5 percent, and raising the minimum dues from $250 to $1,000.
The brunt of the dues hike, however, will fall on processors. SPI is putting those companies back on the same dues schedule as equipment manufacturers and material suppliers, and is increasing the cap on processor dues to $25,000, up from $10,000.
``We are trying to get them back to shouldering the same amount of dues as the other segments,'' Duncan said.
Processor dues were cut significantly in the 1997 restructuring, in a bid to bring more of the estimated 16,000 U.S. molders, extruders and other processors into SPI. But that effort never worked as hoped, Duncan said.
The group's processor membership has fallen from between 800 and 1,000 five years ago to 400 today. SPI officials trace that to business units departing for APC, consolidation among molders and difficulty getting many of the industry's numerous small companies to join.
``The lesson we learned is that the dues are not the issue,'' Duncan said.
The dues increase will raise between $1 million and $2 million a year once it is fully in place. The hike will be phased in during the next three years, Duncan said. SPI's Processors Council unanimously supports the change, Duncan said.
The group also has set a target of cutting spending in its core programs by 20 percent by the end of the year.
More than half of that goal already has been reached with things like cutting back on travel, hiring freezes, bringing outside expenses like consultants in-house and spending less to support the industry's traveling plastics promotion trucks, the PlastiVans, SPI officials said.
``It is our intent to take costs out in a way that has minimal impact,'' Duncan said. ``It remains to be seen whether we can do that.''
The changes will leave SPI with a budget of $7.5 million in its core programs in the short-term. Finances for SPI's trade shows, business units and self-funded programs will not be affected.
In other news, SPI elected new officers at the meeting. Paul Appelblom, president of Jatco Inc. in Union City, Calif., was named chairman; E. Niles Kenyon, president of Conair Group Inc. in Pittsburgh, vice chairman; and Richard Angiullo, vice president and general manager of DuPont Fluoroproducts in Wilmington, Del., secretary.